?If an acquisition can help the development of our search business, then why not go for it,? NetEase Chief Executive Officer William Ding said on a conference call Thursday.

NetEase?s Youdao search service now accounts for 0.4 percent of the local search-engine market, according to researcher Analysys International.

NetEase, trailing Tencent Holdings Ltd. and Shanda Games Ltd. in China?s $3.95 billion online games market, Wednesday reported first-quarter profit rose 8.5 percent to 452.3 million yuan ($66.2 million), from 416.7 million yuan a year earlier.

Revenue from online games rose 50 percent to 1.09 billion yuan in the quarter, NetEase said. Sales of online advertising more than doubled to 91.5 million yuan.

Profitability declined last quarter as NetEase incurred higher marketing expenses and royalty fees for its ?World of Warcraft? role-playing game, licensed from Activision Blizzard Inc. Gross profit margin for the online games division narrowed to 72.1 percent in the first quarter, declining from 90 percent a year earlier.

NetEase may consider a share buyback if the price is right, Ding said Thursday. The company?s cash holdings increased to 7.7 billion yuan at the end of March, compared with 7 billion yuan three months earlier, it said.

Source : Konaxis